Steemit Crypto Academy Contest / S11W01 - The Cycle of Market Emotions

Hello everyone, how are you doing, I welcome you again to my blog in the SteemitCryptoAcademy community.

Today, we will discuss an interesting topic on the platform which will be about: The Cycle of Market Emotions.

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First of all, we will be discussing some common terms in the crypto era, this might be something most experts are already familiar with, but as a beginner who is just finding their way in the crypto world, these terms would be useful for you and have a general knowledge of the term used.

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• Briefly defined the following Crypto related Slogans

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a) PUMP AND DUMP

"Pump and Dump" is a phrase that is commonly used in the crypto market when a market is experiencing manipulation, It happens when there is an artificial increase in the price of a certain cryptocurrency and sometimes misleading information in order to attract buyers to purchasers coin (the pump), then once the price has increased enough, the manipulators will lowkey sell their shares which will cause the price to drop (the dump).

And as a result of this, investors who purchased during the pump phase will lose money when the market drops, and there is a great chance those coins never get back up and everyone keeps dumping.

b) Going to the Moon

When a cryptocurrency project is said to be "going to the moon," it means that its price is risen by miles and is still moving, this phrase is mostly used by crypto traders who believe that a particular coin's value will take a massive run in a short period.

The idea is based on the concept that the price chart of a booming cryptocurrency looks like when shooting up a rocket and it is on its way to the moon.

c) HODL

"HODL" is also one of the most well-known phrases in the cryptocurrency world, It came from a misspelled "hold" in a crypto forum post during a market drop, and "HODL" has since become a meme and an abbreviation for "Hold On for Dear Life. It refers to the act of holding on to one's crypto assets despite the market drops in the hope that their value will rise much again in the long term.

d) REKT:

If you see someone using the phrase "REKT" in cryptocurrency talks, it means that the person was a victim of a significant loss on their crypto investment, It comes from the term "wrecked" and is often used when someone experiences a terrible financial loss due to bad trade.

e) BAGHOLDER

A "bagholder" is an investor who owns a significant amount of a certain coin that has largely depreciated in value, and it occurs that during a bullish trend, these investors must have bought at a higher price and failed to sell before the price fell, and as a result of this, they are left "holding the bag" and facing significant losses.

f) CRYPTOSIS

"Cryptosis" is a fun name that is used in describing the passion and attraction that certain people have for cryptocurrencies and blockchain technology, it is a word that contains a mix of "crypto" and "-osis," which is medical slang. in the usual sense, cryptosis expresses people's curiosity and enthusiasm for cryptocurrency.

g) ICO

ICO stands for "Initial Coin Offering", It is a means of raising funding for crypto entrepreneurs. During an ICO, investors receive freshly issued tokens that they had earlier funded with some other cryptocurrencies such as Bitcoin, BNB, or Ethereum in return for supporting the business. The effectiveness of the project will then determines the future value of these tokens whether it is a good or bad investments.

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• Discussing FOMO

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FOMO is an abbreviation for the phrase (Fear of Missing Out)

a) When does it happen in the cycle?

FOMO is a cause in the market price action that mostly occurs during the bullish phase of a coin cycle, especially when a certain crypto asset gains significant price rises in a short period of time, and as the asset's popularity grows, investors
will come all over and get concerned about missing out on more potential returns, encouraging them to make rash decisions and engage with market purchases as well.

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b) How do we cope with cryptocurrency FOMO?

To cope with FOMO in the crypto market is simple, as a trader, it is important to develop your own trading strategy and stick to your investment plan. You do this by analyzing clear entry and exit points for trades, diversifying your portfolio, and making proper research before making any financial decisions are all part of this, and importantly you should resist the temptation of chasing market trends but rather focus on your trading strategy.

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• Discussing FUD.

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a) What exactly is FUD?

FUD is a popular acronym that stands for "Fear, Uncertainty, and Doubt.", FUD refers to the idea of wrong and misleading information concerning a specific asset or the whole crypto market, this disinformation is designed to cause fear and doubt in investors, perhaps to lead them to wants to sell and disconnect from a project.

b) FUD Causes and Prevention

FUD can be caused by a variety of circumstances, such as certain influencers circulating false rumors in order to influence the pricing value of an asset.

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How to Avoid FUD

Normally, before making investing decisions, it is important to male research and relies on reputable sources of information to prevent FUD, Keep yourself up to speed with what's going on in the market, and always use coinmarketcap to verify your valuable information.

Also, you need to have a thorough understanding of the fundamental analysis of the assets in which you are investing as this will help you distinguish between false rumors.

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• Choose any crypto-asset of your choice and through screenshots, explain in which phase of the cycle FOMO and FUD occur.

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An analysis of FOMO and FUD in WAVES/USDT

Let us now analyze the FOMO and FUD stages in the cryptocurrency pair WAVES/USDT using historical price charts:

FOMO Phase:

The FOMO phase can be seen in the chart below during a price spike in the WAVES/USDT, The green arrow shows the point at which FOMO set in, which resulted in an increase in purchasing activity as investors fear missing out on possible returns and wants to get into the market as well.

[Image: WAVES/USDT Chart During the FOMO Phase - tradingview.com]

FUD Phase:

During the FUD phase, the price falls recklessly as negative news and market uncertainty spreads across the value of WAVE, The red arrow on the figure below shows the moment at which FUD may have affected investor mood, resulting in panic selling and subsequent price declines.

[Image: WAVES/USDT Chart During the FUD Phase]

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Conclusion

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FOMO and FUD are general emotions that can have a significant influence on the crypto market especially when it comes to decision-making. Understanding these two market phases and how to address them is necessary for traders in other to navigate the crypto realm effectively.

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